Lampert Out Of Touch With Sears Strategy

Implications: As Sears falls further behind, Sears retail strategy grows more disparate between divisions which will probably worsen during the new reorganization.  Clearly Lampert is out of touch with what is happening.

Analysis:  Store with in a store concepts are at least 30 years old, probably older.  The idea is a good one provided a retailer has the space, a variety of meaningful brands, and the skill to merchandise dominate assortments with in key product categories.  With the exception of space, Sears fails to meet the other two requirements and that’s why the concept will fail.   Within the apparel category, Sears has few if any good brands that are sufficiently unique to support a store with in a store concept. 

Granted, Lands End is one good brand, but for the concept to work, the company would need three or more strong brands that were laterally consistent with LE to make the concept work.  It’s a big leap for customers to jump from Lands End to Covington, Kari, and Apostrophe.  That’s assuming those house brands had sufficient breadth  to support boutique merchandising to begin with and they don’t.  

The fact is Sears’ was an original leader in the store with in a store concept 50 years ago; especially in hard lines.  Unfortunately, Sears’ management has been dismantling the concept for years.  Once you could build a home using nothing but Sears material and furnish it too.  Today Sears built homes still command a premium resale value because of their quality construction.  But who remembers, better yet, who cares since Sears isn’t that dominant in new home construction anymore.   

A similar case could have been made for auto repair, parts, and accessories.  But those businesses were marginalized by specialty retailers like AutoZone and O'Reilly.  Gone are the Saturdays when auto bays were filled with cars needing tires, mufflers, shocks, tune ups, and oil changes, while their owners shopped Sears.  Now, the auto department is one of the smallest in Sears, the bays are empty and so are the stores.   Appliances and tools remain the last of Sears branded store with in a store merchandising efforts.  They too are being dismantled; especially Craftsman brand.  Kenmore will probably remain at least until it is diluted as an exclusive brand under the new organization scheme.  

Clearly the mini-store strategy is inconsistent with what is happening in the other core merchandising segments at Sears.  That’s probably another good reason why it won’t work too.  It also illustrates just how incoherent Sears’ strategy is and how out of touch Lampert is with his organization.